With parts of California in the dark as the day progresses, I think this is an appropriate subject. Too many people are looking at this as a tempest in a teapot. It is not. The problem is real. It goes beyond the brownouts. It goes to the heart of the pricing, distribution and generating of electricity and even beyond. The policies on how we license and operate plants and transmission lines are also in question.
I have taken an article from Business & Technology 1/29/01 By Randall E. Stross and noted some of the inadequacies in his thinking(?). The full and unaltered document can be found at http://www.usnews.com/usnews/issue/010129/29domain.htm
The price isn't right
It's easy to forget there's no such thing as a free download California: a leading source of wine, movies, and schadenfreude. No sooner did our dot coms implode than we Californians set to work energetically, so to speak, on the power crisis, a spectacle providing ongoing merriment for our fellow out-of-state citizens.
>>>Comment...
I love it, the typical approach. We have a problem, but if it weren't for these people outside, we wouldn't and they need to pay for the problem they have created.
Does California's pitiful state seem due comeuppance for our annoying tendency to lay claim to the future first? From afar, does our deregulation mess seem comfortably distant from your own doorstep, or more precisely, from your own power outlets?
>> Comment
California did not deregulate electrical power. They legislated social engineering to keep electrical rates low enough so "poor people" could afford to squander it. This is a typical California largesse and it has cost them more than they are willing to admit. They have not yet started to pay the piper for these reckless policies. There are realities that have to be considered. Any time the price of something goes below the cost of providing it IN THE FREE MARKET it has causes chaos. Governments that have legislated rent controls have learned this, expensive bad housing turns into no housing. Maybe that is like lower cost electricity turns into no electricity. The Liberal machine hates anything that reduces government control. This failure of a policy in California that is called deregulation is being used as an opportunity to bash deregulation. It is a failure because it was more regulation (price, environmental) under the guise of deregulation. And it ignored all logic and economic reality.
Do you still believe in Reddy Kilowatt? Having just suffered through a temporary blackout here in Menlo Park, Calif., I am tempted to join in local demands that the thievin' power gougers be brought to swift and rough justice.
>>> Comment Stop right there. Thievin power gougers? When power can't be bought wholesale at the
price it is being sold retail, the selling price is too low. You can�t call the seller thievin'. The standard thing here is to blame the producers. Yes, they didn't build more capacity, but they were regulated to the extent that is made it prudent for them to quit building. Have you considered blaming the people who hug trees and institute more government control as possible causes of the problems?
Yet I confess to feeling a twinge of guilt. For I personally contribute, in sundry ways, to the mismatch between electrical power supply and demand. I believe you too, dear reader, are culpable and will eventually be affected. Not because of the regional reach of the Grid and California Gov. Gray Davis's (literal) power grab; and not because you may reside in one of the 25 other states now considering energy deregulation.
>>Comment Again we bash deregulation. After all, to a liberal, the government is the solution to all of our problems... Yet we have seen time and time again, the government IS THE PROBLEM. And the fear tactic is brought out, if we don't have more government control, there will not be power. Let me put it another way, if we don't stop the government control, there will be no power, no gasoline, nothing. And of course there is the continual self flagilation that we are the problem. We use too much. Californians have a lower per capita usage of electricity than any other state. This is a warning. Conservation isn't the answer. If California has conserved and they are in trouble, so is everyone else that tries that bankrupt policy. (Understand, I am in favor of conservation as a PART of the solution.)
Rather, the California crisis is larger than it may at first appear because it exposes a universal fact that has been overlooked: On our way to the digital future, we have been enjoying a free or near-free ride, a form of transportation that, regrettably, exists only in the land of make-believe.
>> Comment California is good at make-believe. The state is nothing more than a larger Hollywood. And they believe the rhetoric they try to pass on. OH. Yes. Aha. We lay the groundwork for blame shifting. It can't be the bankrupt political ideals. Remember these are the same politicians that helped the AIDS epidemic get a foothold by failing to shut down the gay bath houses...
In the news coverage of the crisis, much attention has been devoted to prices, narrowly defined as the mismatch between the newly unregulated wholesale price of electricity and the still frozen retail price.
>> Comment Maybe the attention is there because that is at the core of the problem, albeit it is one of the primary causes of shortage. If there was no shortage the price could not rise except based on costs of production that impacted all producers. An example of this is the price on Natural Gas. ..
Left ignored is other pricing that contributes to the present imbroglio: flat rates for monthly Internet access and cost-free downloading of gigabytes of data, a combination that means the household that gobbles data like a University of Nebraska lineman at the college cafeteria pays no more than the Joffrey ballerina who only nibbles.
>>Comment I've seen some ballerina's that can woof it down. <grin> Sometimes they woof it down and barf it up, but they woof it down. I don't think anyone wants to eat the recycled food. And oh, BTW, let's think about this statement. It makes no sense. Nobody held a gun to someone's head and said, "Provide that internet service for nothing." The companies from the local providers to Internet With Training Wheels (AOL) have done it to make a profit. And the connect fees for the user get rolled up to the connect fees for the ISP and so on. This provides the money for long lines, etc. That provides money to pay for electricity for the routers, switches, repeaters, etc. The communications industry pays its electricity bill, based not on what it is worth, but on what it is billed. That is how it is, nobody is getting something for nothing, unless the producer is charging nothing. And in CA the price was set by, bingo, the "deregulation." The legislature made it cheaper to locate facilities here. Guess what? When it is cheaper to place a facility somewhere, guess where American business puts it?
Freeloaders. The cost of maintaining reliable Web sites (reliability is referred to in the business as "high nines," as in 99.9999%) is absorbed by the site sponsors, which pay other companies to maintain "server farms." These are concentrated in Silicon Valley.
>> Comment. Here is another part of the problem. California, by making its power cheap encouraged a growth rate that they could not sustain by anemic upgrades in infrastructure. The infrastructure problem in CA is rampant. Roads, airports, schools, whatever.... And when you try to build the elite hollywood based environmentalists try to keep it from happening. (CA needs 3 new state universities. The construction of two is on hold, held up by environmentalists. The third was cancelled for that reason. They managed to open one in an old naval base, they didn't need to appease the tree huggers. I expect CA to start paying Penn State to educate their students soon. Happy valley doesn't consider expansion of a college an environmental disaster). The tree huggers will allow a "clean" server farm to be built but deny the permits for the generators and transmission lines for the electrical supply for it. A mite shortsighted, I might say.
A single such data center occupies the space of a modest office building but consumes the power of 10,000 single-family homes. Exodus Communications, the company that takes care of eBay and Yahoo!, among others, has six data centers in just Silicon Valley, which will soon draw an estimated 25 percent of the area's power.
>>Comment I would have to see actual data to believe that number, in fact I can disprove it. And oh, BTW, those data centers probably employ 500 or so people each. These are direct employees, janitors, technicians, etc. These people who would not have work if it went away so if it does, unemployment is up.) And let's say the 3000 direct jobs bring nearly 4000 more jobs into the area. Neglecting that some of these may be husband and wife or co-habitating whatevers, this is about 7000 housing units. A home is about 1.5KW so this is about 10,500 KW or 10 MW. And it doesn't include the 3 or so new McDonalds, the schools, the rest of the supporting companies and facilities. Now let's look at the figure of consuming power of 10,000 single family homes. That is about 15,000 KW times 24 hours or 360,000 KWH a day, or 10,800,000 KWH a month. That's over a half million dollars of power for each data center a month. And even if it were that much, the 10MW is approximately 1% of the output of a power plant class facility. TMI Unit 1, a small plant is 985 MW - close to a thousand MW. So six of these would be about 5% of a good plant, and CAI is further than that in the hole, EVEN IF THAT GROSLY INFLATED figure were right. The real figure is, based on experience in sizing computer rooms, probably less than 10% of the claimed figure. At best this guy slipped a decimal point. Most likely he either listened to someone who didn't know either or he is just plain stupid or he is just plain a LIAR.
Remember this is in a state that has not built a major power plant in more than a decade.
>> Comment Here the liberals disagree. Some say they have and some say they haven't built a plant in the last ten years. The first liar doesn't have a chance. I checked the figures. CA has NOT built a power plant in about 11 years. But there are people who claim they have built 4 plants and give the names and locations. BOTH STATEMENTS ARE TRUE, the one has more than a little spin. If you call a power plant what they are in the industry, a facility of over 900 MW, CA hasn't built one since the late 80's. And they have decomissioned a couple. And are planning to decommission more that are "too polluting or politically incorrect meaning they are coal or nuclear. This ie easily called stupidity gone to seed. They have built four facilities in the last five years that have a COMBINED output of less than 40% of a real power plant. California population is growing at the rate of about one Atlanta a year. They need a TMI unit 1 class plant, 1000 MW or so (no matter what the fuel) to cover each 18 months of growth. That's six plants in ten years. They haven't built one third a plant. And they are behind the curve. Let's see where the responsibility for this lack of building lies. Simply, there is no investment incentive. The environmental harassment is so bad that nobody in their right mind would waste corporate resources on power plants in CA. Retail price is set artificially low by government. Enviroloonies and environazis make construction expensive and risky.
Feeling virtuous because you're careful to shut down your home PC every night? It's a laudable gesture. But the desktop PC consumes only 20 percent of the power used by the Internet. Add up the costs of running the routers, caching pages, cooling the equipment, and so on, and you'll find that to create and move 2 megabytes of data over the Net is said to require the energy equivalent of 1 pound of coal.
>> Comment Most PC's use somewhere about .2 KWH if left on, less when the monitor goes to sleep. As for the two pounds of coal, I am sure of its inaccuracy... Take a look at the "two pounds of coal for each megabyte". That has to be a hyperbole, figure of speech or just plain a lie, not a statistic. I picked up a web page http://www.conwaycorp.com/who/history/coal.html that lists the heat of a pound of coal used at that plant at 8650 BTU per pound. It is Bituminous which has a slightly higher heat output then Anthracite. That 8650 BTU's converts to 2.5 KWH, with generating and transmission losses, 1.25 KWH at your house or business is more than we could reasonably expect good. Even the very high level routers are not more than 5KW and few are above 2. So you have to take the 30 or so pounds of coal for a day and divide it by the megs of data. With these routers handling 100's of GB a second, the amount of coal for this is very small. Even multiplied by 100 for multiple routers and then doubled to cover the servers and transmission facilities we don't get to within 3 orders of magnitude of his claim. This is the usual junk science environmental mind set. Throw out a number that is impressive and hope nobody will question it. I have done the environmental calculations for several computer rooms. Knowing what other industry takes, I find the 25% used by these data centers just as incredible. For example, California has significant food industry with its associated cooling and freezing units. One medium sized freezing system is hundreds of KW each hour. I think this one is also blowing smoke.
The Internet, that bucket brigade transferring data around the globe, sprang up without a master plan for commercialization, and there is no simple way to make heavy users pay the true costs. The famous 1954 prediction of Lewis Strauss, chairman of the U.S. Atomic Energy Commission, that electrical power would be "too cheap to meter," has not come to pass.
>>Comments Nuclear was killed by Jane Fonda, China Syndrome, and TMI. BTW. The China Syndrome DIDN'T happen there, in spite of uncovering the core TWICE within 3 hours. But then Jane has not recalled the movie for accuracy retrofit and she still stumps the cause. So much for Hanoi Jane and her truthfulness. But then the Viet Nam Vets knew she didn't specialize in truth.
But as consumers, we can take as large a byte of the Internet's vast offerings as we wish without having to pay a charge related to the volume of data ingested. Insulated from the costs, Web surfers will naturally enough take due advantage, heedless of what economists refer to as externalities, or the costs that someone else has to pay (or an entire city of someone elses, as when the next rolling blackout instantly makes San Francisco look like Lagos).
>>Comments Come on. I pay for my access. That money goes to my ISP... My ISP pays for their connection that is rolled into backbone charges. The servers are funded by the people who want them there for advertising. The companies that run the server farms pay for their electricity. The data carriers pay for their electricity. The rest of the world can't help if CA decided to price the power too low to guarantee supply. If the premise here is right, (and it appears to be mostly bunk) then the CA companies should be paying more for electricity (I agree) and the ISP's and the advertisers should be paying more, and I should in turn be paying more for my service.
Unlimited Internet access for a flat monthly rate is a luxury that Web surfers in most European countries do not enjoy.
>>Comments So? What does Europe's mess have to do with us? Them being screwed up on a lot of things was the reason we are here. They have a backward telecom system. It is hard to get some accesses there that we have. We are still hamstrung by the vestiges of MA Bell, a tribute to regulation.
It is not directly responsible for California's energy shortage.
>> Comment Dang. He got that one pretty close. Drop the directly and he is closer.
But the mentality that it reinforces, that using technology carries no marginal cost, is plain wrong.
>>Comments There is always a marginal cost. The CA legislature is the one that missed it. They need to raise rates, encourage plant building, gag the environmentalists (or run over a couple with bulldozers) and keep out of business which politicians obviously don't understand. The politicians in Sacramento made the mess. Why does anyone think they can fix it? Why would you expect politicians like them in Washington will fix it?
Only five years ago, AOL still charged its members on an hourly basis. Reluctantly, the $20-a-month flat price set by independent Internet providers forced it too to move to a flat-price model. AOL then weathered an embarrassing breakdown of its dial-up systems when users gorged themselves on the unmetered service.
>>Comments AOL screwed up here if this is right. But then why was AOL needing more money to provide the same service? Easy, internal inefficiency. Bloated bureaucracy. Sounds like government.
At the time of the change, AOL head Steve Case sent an E-mail asking that members "moderate" their use at peak evening times during the transition. ("Just as you would be sensitive about using a public phone booth if others were waiting in line.") In just two days, his plea drew 17,000 messages from irate members, livid that he was hedging on the "unlimited use" bargain.
>>Comments Heck. You sell a service and then say, "You bought what I promised and now I am asking you to not use it." Come on. Has anyone here ever heard of breach of contract? I know someone will say there wasn't a written contract. Yes, but did integrity go too? (Sorry I forgot about WJC. It depends on what the meaning of the word is is.)
That, in microcosm, is the larger problem we will face as a society at some point: how to moderate use of energy-gobbling resources to which we currently have nearly unlimited access. Who would prefer the intricacies of cost accounting to the all-you-can-eat buffet? No one. That is, until the lights go out.
>>Commnets Energy gobbling? No way. Let's look at the other things Californians do. Backyard patio lighting may be more than the internet. Are they willing to turn that off? Remember if they turn off the patio lighting the fun stops, if they turn off the server farm the income stops....
Comments by Ralph Brandt. Copyright 2001.
From AP.... (several months ago)
In a stopgap effort to keep electricity flowing, Gov. Gray Davis (news - web sites) signed emergency legislation Friday allocating $400 million in state funds to buy power and provide it to cash-strapped utilities.
However, lawmakers acknowledged it that was only a ``Band-Aid'' solution expected to provide the state with adequate supplies for a week or two while they try to work out a long-term solution to the crisis. They were meeting Saturday to discuss a rescue plan.
It's a crisis that has driven the state's two largest utilities, Southern California Edison (news - web sites) and the Pacific Gas & Electric Co., to the verge of bankruptcy. But the state Public Utilities Commission (news - web sites), ruling insolvency is no excuse, barred both from cutting off power to their 25 million customers, at least until a Jan. 29 hearing on the matter.
Comment.. The state of California is putting up STATE FUNDS to buy electricity to sell to the distributors. This is one more step toward socialism. It is the idea that Electrical service is a right. Liberal ideas usually start good. "We can't let these people in California go without power." Right. But they have to pay for it... And you can argue that the taxpayers are the same people. WRONG... Another bogus liberal idea. With the inequities on the tax laws this is not the case and if we really want to be fair, the users need to be the ones that pay. Raise the rates to cover the $300 million. This will also make the corporate users pay for what they use.
The Caifornia "deregulation" which was really more government control was a bad plan with wrong motives. It was to reduce power costs, NOT make the market drive the cost as in PA. The Pennsylvania law REDUCED government control while INCREASING government OVERSIGHT. (Understand, PA government makes a lot of mistakes, but this was one really good plan.) The PA PUC has less control but more ability to step in to handle abuse. And there is a very big difference!
I still have GPU transporting my power to me, same as before. And I still have GPU as my generator, although I have the choice of probably twenty companies. I elected to stay because they had good pricing and reliability. I could have chosen one that claims (fraudulantly) that they sell Green power at about 1/2 cent higher price per KWH. I think this CHOICE is valid for us to make. I could have chosen a company that uses no nukes. I can by my checkbook influence the direction these companies go. GPU had nukes and I think that is the right direction. They sold them recently and I may pick a different supplier next time based on that sale. And if the generator increases its prices, GPU will still get the money to deliver that power from me and I will pay that company for my electricity. GPU does not care if I pay 1 cent a KWH or $3 a KWH, they still deliver it. And they get paid to deliver it. And I pay them for the electricity and they pass the money to my supplier, or keep it if they are my supplier. I make my choice. And I signed a one-year no increase contract. I could have signed with a spot market supplier that would have given me a lower price that can float with the market. That is what happened in California to the power companies.
The other failing in the california plan was the spot market buying. This is great when there are bargains and excess of supply. In the US we have not built generating capacity anywhere fast enough in the last 20 years. TMI shut down the nuclear industry that was the only real growth area. The spot market in a shortage market is one of high prices! Instead of each consumer buying the power on one-year contracts (PA Plan) the power distribution companies are prohibited from making long term contracts by state law...
This was the plan for disaster and it happened...
Why do people think that the same people that made the problem will be able to fix it? (Another liberal lie)...
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